In all the press coverage regarding MSFT's fine performance, there is not one mention of Zune.

"In all the press coverage regarding MSFT's fine performance, there is not one mention of Zune"

Copy-n-paste from their press release:
Microsoft rolled out new consumer focused offerings during the quarter such as Windows Home Server, new versions of the Zune media player and...

Their 10-Q mentions Zune three times.

In the above blog entry I think the author meant "finally reached profitability" rather than "sustained profitability."

Investment advice : stay far away from Microsoft stock.
Microsoft recently payed billions for a search engine? Do you think this makes shareholders feel good? No wonder MSFT shares have been flat since 2002. It's a classic super-tanker stock with a ton of holes.

How would you feel if your money returned 0% since 2002?

In the cold of my own.

Last night,
with a wispher
in the sunshine
of a melody, I tried
to invent the
sound of a tender
emotion and also
my life discovered
the minute and
a beautiful child.

Francesco Sinibaldi

"In the above blog entry I think the author meant "finally reached profitability" rather than "sustained profitability."

Point taken. However, note that the division Zune is in swung from 3M+ losses to 3M+ profits. The first-generation Zune may not have helped much, but perhaps didn't hurt much either. As I have heard, both generations of Xbox loses money for every unit made, so perhaps heavy kudos go to the Halo franchise. MS says, "We may not achieve significant revenue from new product and service investments for a number of years, if at all. Moreover, new products and services may not be profitable, and even if they are profitable, operating margins for new products and businesses may not be as high as the margins we have experienced historically."

It was this quarter that the second-gen Zune was released, so we could possibly see kudos or knocks on it in the next quarterly report. But it probably won't be a significant money-maker. Hardware seldom is.

Which brings us back to Xbox: if MS was serious about profits, they would write and release DX10 games...or at the very least, more titles for Windows. Gaming has always been what drives hardware, and the platform those games are written for retains or becomes the dominant platform. It still surprises me that MS released DX10, and we had to wait for months to see a few compatible games trickle out...Gears of War, at the least, should have been ready soon after Vista Gold. Halo 3 would have made Vista the "must have" platform, but they purposely missed that boat. And what was it they were thinking making a DX9 game exclusive to Vista with Halo 2? It makes me shake my head...why are they separating their gaming from the most dominant platform?

As you can probably tell, I don't think Zune has up to 1% of the importance as Windows has as far as MS profitability or stock value.

With 900 accountants 1500 lawyers it’s not hard to create what ever numbers you want. The Vista mis step will take a while to unmask but when it does it will shake MS at its core. MS successes are based on subtle extortion, but extrusion all the same. Every MS product line’s business models talks about trapping consumers all the while Mr. Bill Ego talks about innovation and choices. I don't think forcing new PC buyers to Vista is a straightforward sale.

My apologies to Terrance for causing his lengthy responses - I'll clarify: Did Zune generate a profit? How many 2nd generation Zunes have sold?
Everyone knows a 2nd generation Zune was rolled out - How is it affecting the financial performance of the company?

Vista: It makes no sense to quibble over "missteps". Vista is the next version of Windows you get. When you put a cup under your faucet and turn the valve you get your next cup of water - it's just like that.

BTW, I asked why there was no media coverage of Zune financial performance. I guess it took a while to unravel all the spin, but at least it's mentioned once in this article:

http://www.roughlydrafted.com/2008/01/31/video-game-consoles-2007-wii-ps3-and-the-death-of-microsofts-xbox-360

Does "channel stuffing" = "cooking the books"?

Also, the YHOO deal has pushed the stock toward 30 (wrong way Brier). But you have to admire anyone who tries to spend $44B. At least it's a bold move.

"So will MSFT finally approach $40?"
- Based on today's news, I think the question is now: "When will MSFT fall below $30?"
This is not a stock to buy right now - as the markets have shown today.
It's now 20% below it's October high of $37.50
I don't expect to see $40 stock this year, & only give it a 5% chance of hitting it within the next 3 years.

Ouch $29 and change Softies must be looking for chicken little!

MSFT ia rated a very strong SELL. There is little upside in MSFT until the 2035 liquidation. We have set the buy price at $8.